Premium Only Plan (POP)

One of the best ways to save taxes

IRS-sanctioned Premium Only Plans (POP) were created by the Revenue Act of 1978 and are governed by IRS Code Section 125. With a Premium Only Plan (POP):

• Employees don’t pay FICA, federal, or where applicable, state or local taxes on money used to pay for their portion of employer-sponsored insurance premiums
• Employee’s tax savings help defray the cost of insurance premiums.
• Employees can increase their take home pay
• An employers taxable payroll is reduced by the total amount of employee contributions for benefits. Lower taxable payroll means lower payroll taxes.

Any employer can sponsor a Premium Only Plan (POP)

Regular corporations, partnerships, S corporations, LLC’s, sole proprietors, professional corporations, and not-for-profits can all save money on payroll taxes by establishing a Premium Only Plan (POP).

Who can participate?

While regulations prohibit a sole proprietor, partner, or members of an LLC, individuals owning more than 2% of an S corporation, or their spouse and dependents, from participating in the POP, they may still sponsor a plan and benefit from the savings on payroll taxes.

Begin saving taxes immediately.

You can start your Premium Only Plan (POP) at any time. Plus, you can have a short plan year for the first year, so that future plan years coincide with either your fiscal year or the calendar year.